Companies Wipro healthcare division head Jeffrey Jalil resigns

Wipro Ltd’s healthcare and life sciences division head Jeffrey Heenan Jalil has resigned, the second senior executive to exit the Bengaluru-based information technology (IT) outsourcing company since Abidali Neemuchwala took over as chief executive officer (CEO) in February 2016.

Wipro has appointed an interim head to oversee the $1.1 billion healthcare business division even as the firm looks for a successor to Jalil, according to an executive familiar with the development.

Clients from the healthcare and life sciences business accounted for 14.1% or $1.13 billion of Wipro’s $8.06 billion revenue last year.

Jalil, a senior vice president who joined Wipro in May 2007, is believed to have put in his papers earlier this month, according to the executive mentioned above.

A spokesperson for Wipro confirmed Jalil has left the company, but did not give a reason for his exit.

“Mohd Ehteshamul Haque, senior vice president and vertical head for healthcare & services has taken over as the interim head of the health strategic business unit,” the spokesperson said.

Over the last few years, Wipro has managed to retain almost all of its senior management leaders after former Tata Consultancy Services Ltd veteran Neemuchwala succeeded former CEO T.K. Kurien. Until Jalil’s exit, Wipro had seen only its former chief business officer, Satishchandra Doreswamy, leave in March 2016.

Still, despite a relatively smooth CEO transition, Wipro has struggled for growth, largely on account of under-performance by its large industry verticals, like its healthcare segment.

Over the last three years, Wipro’s revenue growth has been lower than industry body Nasscom’s growth forecast for the industry.

Noida-based HCL Technologies Ltd surpassed Wipro to become India’s third-biggest software services provider in the quarter ended June, marking the first change in the pecking order of the $167 billion Indian IT outsourcing industry in six years.

In 2016, Wipro spent $460 million to buy HealthPlan Services, a Florida, US-based technology firm, as the company expected to scale up revenue from its clients in healthcare.

The acquisition of HealthPlan, which reported $223 million in revenue in 2015, was then estimated by analysts to bring over $60 million in quarterly revenue for the company.

However, revenue from Wipro’s healthcare unit had increased by just $51 million to $271.55 million at the end of June 2018 from $220.6 million in December 2015.

During this time, Wipro’s overall quarterly revenue improved 10.2% to $2.03 billion from $1.84 billion.

For this reason, some analysts believe that CEO Neemuchwala is now looking at making changes in business segments which have lagged.

“Clearly, the weakness in the healthcare business unit is symptomatic of the company’s overall under-performance and I won’t be surprised to learn if Jeff resigned because he would have realised that Wipro was looking to replace him with someone else to lead the unit,” said a Mumbai-based analyst at a domestic brokerage, on condition of anonymity.

“Finally, it’s the CEO who is held accountable for a company’s growth. So it is only expected that Neemuchwala, now in his third year as CEO, is finally cracking the whip and taking these decisions,” he said